Councils across Wales are grappling with extraordinary budget pressures totalling an estimated £559 million in 2025-26 which, if left unfunded, would significantly impact councils’ ability to deliver essential local services.

Councils are experiencing rising costs in various service areas, particularly children's services, education, and homelessness support. The increasing demand for placements for vulnerable children has led to substantial financial strain, with some councils reporting emergency placements potentially costing as much as £1 million for a single child due to staffing requirements. Education and schools account for nearly £120m of the pressure, around a fifth of the total, highlighting the financial challenges councils face in maintaining essential educational services.

The Welsh Local Government Association (WLGA) has identified five budget priority areas that are critical for addressing the needs of communities across Wales. These areas include:

• Schools and Education, which aims to enhance learning outcomes and support for students
• Social Care, focusing on the welfare and support of vulnerable individuals;
• Housing and Homelessness, addressing the urgent need for affordable housing and support services.
• Regional and Local Economic Development, which seeks to stimulate economic growth and resilience.
• Capital, ensuring that investment is directed toward infrastructure and long-term projects that benefit local communities.

Councillor Andrew Morgan OBE, Leader of the WLGA said:

“The £559 million in pressures on councils is unsustainable. Without extra funding to maintain services, councils will struggle to maintain the services that our communities need, especially during these challenging times. We must work together to secure the necessary resources to ensure that no one is left behind. By prioritising the five key areas identified by the WLGA, councils can work towards delivering effective and sustainable services that meet the diverse needs of their residents.

“The WLGA has emphasized that, despite these challenges, councils remain committed to supporting their residents and working with Welsh Government to help deliver their priorities, but with budget pressures on the rise, it’s really important for both the Welsh and UK Government to step up and provide the investment we need to keep these essential services running.”

The WLGA urges both the Welsh Government and the UK Government to undertake a robust assessment of the financial implications of its proposals and provide the additional funding to support councils in their delivery of vital services. This includes funding for regional and local economic development, which has been directed via councils following the loss of EU funding after Brexit. With adequate investment, local authorities can continue to help deliver for residents, businesses and communities across Wales.

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